[Click eStock] "Isu Petasys, Order Momentum to Continue Next Year"

[Asia Economy Reporter Song Hwajeong] Yuanta Securities forecasted on the 6th that Isu Petasys will continue its order momentum next year and expects it to achieve its best performance in nine years. No investment opinion or target price was provided.

Researcher Lee Jaeyoon of Yuanta Securities stated, "Considering the advancement of the telecommunications industry and the international situation, the recent order momentum of Isu Petasys is likely to continue next year," adding, "Isu Petasys's consolidated annual sales and operating profit for next year are expected to reach 508 billion KRW and 55.6 billion KRW respectively, representing an 8% and 35% increase compared to the same period last year, marking the highest performance in nine years."

This year, the maximum transmission speed of Ethernet has been raised to 400Gbps. Accordingly, the number of layers in multi-layer printed circuit boards (MLB) has increased to 26 layers or more, and demand for products applying special processes such as VIPPO and IVH is rapidly rising. Generally, as the number of MLB layers increases, the technological entry barrier becomes higher, and with the addition of VIPPO and IVH processes, the number of companies capable of supplying high-spec MLB is decreasing. The unit price of high-layer MLB including VIPPO and IVH processes is 1.5 to 2 times higher than that of existing products. The researcher analyzed, "The global MLB market is estimated to be about 2 trillion KRW, with around six companies accounting for more than 70% of market demand," and "Only 3 to 4 companies can respond to the rapidly increasing high-value MLB market, and Isu Petasys is the only one in Korea."

The US-China trade dispute is also working favorably for Isu Petasys's MLB competitive environment. The researcher explained, "Major front-end companies such as Cisco, Nokia, Ericsson, Google, Amazon, and Microsoft are showing a trend of moving away from China in component sourcing," and "This is the reason why recent MLB orders are concentrated on Isu Petasys."

Based on such a favorable environment, it is expected that the market capitalization will easily surpass 400 billion KRW. The researcher said, "Despite the expected record-high performance in nine years, Isu Petasys's market capitalization, considering the capital increase, is about 240 billion KRW, with a price-earnings ratio (PER) of only 7.8 times in 2022," adding, "The fact that benefits are concentrated due to the high-specification of MLB following the evolution of telecommunications technology, the Hunan subsidiary in China, which had recorded large deficits for the past seven years, has successfully turned profitable in the last three years by reorganizing its product portfolio centered on telecommunications equipment, and the withdrawal of another deficit subsidiary, Isu Exaboard, is expected to positively impact not only the consolidated performance improvement but also provide an opportunity for Isu Petasys to actively respond to the high-spec telecommunications equipment MLB market."

This content was produced with the assistance of AI translation services.